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Etihad’s Swiss Arm Boosts Access to Restricted German Market

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Feb. 4 (Bloomberg) -- Etihad Airways PJSC will use its new Swiss unit to add flights to Germany, deepening penetration of a market where a cap on direct flights has already caused the Gulf carrier to invest in Air Berlin Plc.

Etihad will fly a 50-seat Saab 2000 turboprop plane four times a week to Stuttgart from Geneva, served directly from its Abu Dhabi hub, under the Etihad Regional brand, the Middle Eastern company said in a statement today. The route will be run by Darwin Airline, in which Etihad has a 33 percent stake.

The move should allow Etihad to sell tickets between Stuttgart, home to Daimler AG, and dozens of global locations under its own flight code, helping overcome treaty restrictions that permit direct flights to just four cities -- under which it serves Berlin, Frankfurt, Munich and Dusseldorf. Etihad’s investments in smaller carriers such as Darwin and Jet Airways India Ltd. aim to feed long-haul flights where financial returns are far higher than from short-haul routes alone.

“This is a step-change,” Etihad Chief Executive Officer James Hogan said in the statement. “We are creating a unique approach to network development. European travelers will now be able to connect from a far, far wider range of European towns and cities through Abu Dhabi to our destinations worldwide.”

Leipzig Link

Etihad said Nov. 17 that it, Air Berlin and Air Serbia would all code-share on Darwin Air routes, with reciprocal arrangements on their flights, subject to regulatory approval.

The Gulf carrier plans to commence services to Zurich starting June 1, a route that would open up a code-share link via Darwin from the largest Swiss city to Leipzig in eastern Germany. Darwin will increase competition both for Deutsche Lufthansa AG’s Swiss unit and the Germanwings arm in Stuttgart.

Air Berlin already provides Etihad with code-share access beyond its four direct German destinations to three additional cities -- Hamburg, Nurembourg and Stuttgart.

Operating under the same Germany-United Arab Emirates treaty restrictions, Dubai-based Emirates, the world’s largest airline by international traffic, chooses to operate direct flights to Hamburg, as well as Frankfurt, Munich and Dusseldorf.

Etihad said yesterday it will decide by early March whether to buy a stake in Alitalia SpA of Italy to add to a portfolio of investments already spanning Australia to Ireland.

To contact the reporter on this story: Richard Weiss in Frankfurt at rweiss5@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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